By Christian Takushi MA UZH – 4 September 2015 – Switzerland.
The courageous step of Germany to push EU laws aside in order to welcome refugees from war-torn Arab-Muslim nations is one of those risky but defining moments in history. Giving thousands of war-scarred people a new home, hope and future is also increasing the sympathy and trust people around the world have been feeling for Germany, German products and the Football team that won the 2014 World Cup and the hearts of millions around the world. In an unprecedented mobilization at all levels of government and society, Germans have opened their hearts to people in need. This is remarkable given how aware they are about the political and security risks – including the likelihood of radicalized Islamists joining the refugee stream. The compassionate response by Germany has set this country apart and is allowing more nations to rally behind her. Germany’s admirable reaction confirms our analysis from July 2014, that this nation’s radical dealing with her own past failures – in a way no other nation has probably ever done – has allowed her to build a strong moral collective foundation. One that is allowing her to lead as a Moral Power with growing acceptance on all continents. Over the past two years different polls (BBC, Economist etc) were already showing it was the most trusted among major powers. We also believe that their own tragic refugee experience at the end of World War II (WW2) is enabling them to identify with Syrian refugees. A dark history chapter very few people outside of Germany are aware of: back in 1945 no one came to the rescue of millions of German civilians fleeing their homes in Eastern Europe. We are witnessing the Rise of Germany as a Global Geopolitical, Economic and Moral Power, aided by a widespread rise in sympathy across the globe.
This contribution is the 2nd note I dedicate to the Rise of Germany as a Global power. The first one was written in July 2014. You can read it here:
There is no doubt that this is a tremendously risky step. Indeed, the possible problems and risks for Germany in the future are huge. To mention just a few, there is the steep cost of integrating so many people that are foreign to Western customs and the risk of infiltration by Islamic radical elements. But it is because of these amazing risks and costs, that the bold leadership of Germany is so impressive, commendable and historic. Some may think I’m a bit naive or Socialist-biased. But those who know me for years know well that I am a conservative economist with a conservative political worldview. Having an immigration background myself. Growing up with three different cultures, I have always cautioned about mass immigration, because many are unaware of its cost and pain. Having said that, I was reminded last week of my grandparents, who were strangers in a foreign and unwelcoming land during WW2. Their hardship and rejection motivates me to take a stance. The world is not facing a migration crisis, rather an unprecedented refugee crisis. That is something different. And maybe this great crisis is a great chance to start doing things differently, giving foreigners in need a chance and the benefit of the doubt. This massive gesture of compassion towards Muslim refugees by a Christian nation might help to stem radical Islamists’ efforts to convince and recruit terrorists to harm other Muslims and Western citizens. After trying to stem terrorism with bombardments, anti-terror measures and law enforcement, an act of collective compassion may prove the most effective weapon against the hatred that feeds the terror. Although this act of compassion and love probably can’t stop it, it could still represent a watershed moment. I could imagine that although radical Islamist leaders may want to take advantage of the refugee stream, they are also deeply concerned about the effect this tremendous compassion of a Christian nation could have on the collective sentiment amongst Muslims towards Westerners. Many Syrian refugees have said emphatically nobody has treated them as well as Germans, and that Austrian and Swedish citizens are breaking the law risking arrest & jail to help them. In today’s smartphone world, given the treatment refugees have had so far, those positive experiences are spreading like a bush-fire of hope. Not only could it be harder for radical Islamists to generalize over Christians and Westerners, we also in the West may have to move away from generalizations and popular clichés about Muslims. This tremendous outpour of compassion will probably transform not only those receiving it, also those giving it. I have no doubt that this unexpected compassion will help heal to some extent many of the wounds and scars in the hearts and minds of these war refugees.
A nation acquainted with war, pain and refugees: 12 million Germans had to flee at the end of WW2 – with 2 million* killed as they had to flee from their homelands in Eastern Europe
It is not surprising Germans are the first at upholding the rights of refugees, regardless of their race and religion. It is acknowledging there is a law that is higher than EU law, economic theory and self-interest. It is the law of love, compassion and decency.
It may come to a surprise to many people, even well educated ones, that Germany has a traumatic refugee experience of her own. Over 12’000’000 German civilians fled the advancing Soviet troops at the end of WW2 or were expulsed from their homelands in Eastern Europe (East Prussia, Sudetenland etc). Many were attacked by mobs, regular infantry, tanks, aircraft and artillery on their long march to the West. Approximately one in six never made it to the Western regions of former Germany. At least 550’000 died from enemy (Allied) fire or violence, starvation or the freezing temperatures.
The hatred against Germans was so high, public opinion and Allied Command turned a blind eye. In just 5 years a war-decimated country had to welcome and absorb over 10 million refugees from the former German lands in Eastern Europe. The trauma of those who survived the escape is one of those forgotten dark chapters of mankind. For two reasons: at home Germany embraced her guilt as aggressor, the own suffering and crimes by Allied forces was suppressed. Abroad, the victorious Allied Forces struggled to deal with the magnitude of the slaughter of civilians, it was never really properly addressed nor repented of. Historians often say: “history is written by the victorious nation not the defeated”. I personally believe the fate of 12 million refugees at the end of WW2 is still alive in the collective memory of Germans – surely a very faint memory that has not been fed nor watered over 70 years. Yet it is there not to stir people to go back in the past, but to action and compassion today. Indeed, 70 years after WW2 millions are fleeing war, destruction and violence again. Looking at the tragic state of the Syrian refugees on the road, Germans are acting and leading the world to show compassion. Not just to send money, but to open their nations and homes. The response of Germany to the suffering of these war refugees from Muslim-Arab countries is an act of compassion and an act of faith, because they are aware of the unknown risks and costs.
A test for a Christian continent, a chance to help, and a chance to help without judging those who can’t
This refugee crisis is becoming a major test for a continent that has proudly called itself Christian for centuries. At first and for a few years we all could watch the drama unfold on TV, read about it and maybe leisurely join discussions about it. But when war refugees began to stand in front of our European doors, holding their exhausted kids in their arms, this was a crisis we couldn’t escape anymore. With desperate human beings on our door-steps, we can’t simply keep our conscience clean by making some donations to UNHCR camps in the Middle East. This crisis has become personal. It fills some with compassion, others with frustration, others with anger, others are overwhelmed at the shier complexity of the task. Can I analyze history, geopolitics and the world economy cold-heartedly and from a distance analyze the impact of this refugee crisis on the world economy? No, I can’t. I – like many other conservative thinkers – can only put my many rational reservations aside to embrace these people in need in my heart. They are in my prayers to the Almighty at night, because my family has a warm home while these Syrian refugees are camping outside in the cold. In a way my family’s history has helped me make up my mind. My grandparents fled once hardship and war in the Far East, but were not welcome in Peru as they had hoped for. In Japan Okinawans faced hardship by Tokyo and great sacrifice was asked of them from 1920 to 1945, in Peru they were soon war enemies. Like most Germans I can’t undo what happened to my grandparents and parents, but I can do something about war refugees today. This refugee crisis is testing our convictions. But let us not simply admire Germany or judge those who can’t show compassion, let us follow Germany within our possibilities. The more nations follow, the better the task can be achieved and the better the risks also contained.
If the study of history and economics only keeps us busy with the past and how much something is going to cost us, then future generations may pity us. I have received criticism in recent weeks from some conservative friends and even Christian friends. I have to admit most of their points are valid or at least worthwhile pondering. The risks are daunting, Islamist terrorists might be among the refugees, their religion is incompatible with our culture etc. Let’s be self-critical. We, conservative thinkers, often argue with the Judeo-Christian values and faith on which our continent was built. Well, this is the moment to practice them. If these helpless Arab mothers and children cannot touch our hearts to compassion, then we may have become cold-hearted and our Christian faith faded away. We may have departed from God and left with nominal religious values. This is a test to our Christianity. Will we turn war-traumatized exhausted families away, because some radical Islamists might be amongst them? Didn’t Jesus command us to love and bless even those who want to harm us? Didn’t Jesus say don’t send away your neighbor if he comes needing something while you have the power to help? Because of my conservative background I confess that I have struggled for weeks, but I had to make a decision. Yes, I’m a still a conservative thinker that loves order and progress. I’ve just realized this is empty if I don’t love people more than order and progress. I feel my Christian faith would become just an nominal religion and empty tradition if I would say it is OK to turn exhausted war refugees away.
Daring to stand up
While most nations were saying “why should we take them if the richest Sunni-Arab nations don’t take them”, “we can’t possibly take the risk of taking so many Moslems” and “the costs are impossible to calculate” etc, Germany has shown us all the way. Where silence would be more suitable, many governments are drumming up their statistics to air their outstanding immigration and generosity record. What they don’t realize is that the more they make that marketing or justification effort, the less credible they are for a world that is closely watching them. Most nations in the world with the exception of a compassionate few (Sweden, Austria, Turkey, Lebanon, Jordan etc) have been humbled by the gallantry and courage of Germany.
We are witnessing these days the Rise of Germany, a nation that has been rising unassumingly for over 60 years. It is not a rise with military might and threatening posture. It is a much more appealing and enduring rise: one with tremendous moral authority flanked by reliability, excellence and a market economy that is contained by the state to ensure all stakeholders benefit. The growing acceptance of Germany around the world became obvious last year at the Football World Cup. And this crisis will have a tremendous impact on that secular trend. This week the news reported that Germany is spending the huge amount of Euro 7 Billions for the refugees. But as German executive in the automotive industry told me today, he believes Germany is investing (not spending) Euro 7 Billions in refugees. Refugees are not simply a cost he said. And I feel he is right. I’m convinced that Germany will be blessed and rewarded for its compassion – This will turn out to be a handsome fruitful investment. Even if a few abuse this generosity, some fall out and others tun out to pose a threat, the overwhelming majority of these war refugees will most likely show their gratefulness with devotion, work and creativity. Some people tell me “what if they turn against us?” I say, I don’t think that will happen. Thankfulness is a powerful force. After all almost no other country has really welcome and treated these refugees with so much decency and dignity. The Syrian family of the little ill-fated Alyan Kurdi that escaped fierce fighting in Kobane was reportedly denied asylum in Canada, which forced them to try to cross the sea. And as the aunt reported they were scared of drowning. It is my belief little Alyan and his mother and brother did not die in vain. And I also believe these Syrian refugees are likely to rejuvenate Germany, love their new home-country and contribute for years to come.
Some have concerns over Germany’s economy: cost competitiveness
Many economists, finance experts and corporate executives may disagree with me in my assessment of Germany, because they see it as not totally embracing the capitalist free market economy. They point to the high level of energy costs due to the exit from Atomic Energy. They see a nation that does not reduce costs enough and where big businesses enjoy less powers and freedoms than elsewhere. They say it is not cost-competitive enough. But some of the things people in the financial realm see as negative may be more positive when seen from a wider perspective. Too much is being sacrificed all over the world for so called cost-competitiveness. Many countries are impoverishing their people for the sake of competitiveness. As a macro economist I look at all the externalities and can say only big firms are really benefitting from that extreme form of market economy. One obsessed on accumulating and maximizing profits in the short term regardless of the external costs and long term consequences; a morphed capitalism where big firms accumulate all the profits, pay little taxes and their top executives and shareholders get most of the rewards. No country is free of problems and risks, and Germany sure has a few challenges. But Germany is one of those market economies with a balanced structure. The federal government doesn’t let big businesses simply keep all the profits while laying off workers. Unions cannot abuse employers, nor can employers abuse workers. Not perfect, but better than what you see in most Western economies these days. Still, Germany has had its share of cost cutting and reduction of social welfare, ask Hartz IV workers. Thus, it is not a Socialist’s welfare paradise. But this country provides an excellent education for everyone that wants to learn a trade. It is suffering with a China recession, but China will not disappear. Germany has the education system to train the new refugees and to help them build a new life in safety. One of the reasons why I believe the Syrian war refugees will as a whole contribute positively to Germany is the dramatic decline in the German workforce that lies ahead. Thanks to this mass influx of refugees, with many of them trained to work, the income-generating work force could be stabilized. I’ve heard many young Syrians dreaming to study and learn a trade in Germany.
There are free-market supporters that are upset at Germany, because it is not sold out to the “winner takes it all” profit maximizing Anglo-Saxon economic model that pervades today’s world economy. But is the latter really working? As a trained macro economist I can tell you there are few genuine market economies left in the developed world and among large emerging nations. We have to go to some small and mid-seized emerging markets to find pure elements of market economy and total competition. In the USA, China or Brazil policy makers are fixing currencies, prices, bond prices, equity prices and expectations. In the USA a once free market is now almost dictated by big businesses that tell Congress what they want for the sole benefit of shareholders. The only ones really paying their fair share of taxes are the declining or impoverished middle class as well as small and mid-sized companies.
A true Market Economy aims at maximizing profits for the benefit of all stakeholders – and profits are not simply accounting profits, but economic profits which include all externalities. Economic profits take into account all externalities like environmental costs and costs to society. Laying off workers to simply benefit shareholders at the expense of all other stakeholders, adds a burden to society. Worse than a zero sum game long term as discretionary consumption demand is eroded, reducing demand visibility and forcing more firms to cut yet more jobs. Nevertheless, no economic system can do well if shareholders are neglected; in fact they are key and should be motivated to commit capital. But the current extreme simplification of Economics to benefit large shareholders at the expense of workers, the environment and future generations is very counterproductive, destructive and about to backfire.
Germany leads the world towards Renewable Energy, because it is the moral and right thing to do. Despite higher energy costs and reduced cost-competitiveness in the short run. Now it leads in compassion towards Muslim refugees despite the costs
Given the extremes in the world, the blind profit-maximizing one and the totalitarian state capitalism of China, and given the failure of governments to contain the influence of big businesses and the excesses of extreme forms of “market economy”, Germany seems to be an acceptable working alternative to more and more rising nations. One in which through pragmatic mid-Level education (apprenticeships) and government balanced steering, a large part of the population can earn still a decent living. A well educated population can add value and that provides a down-side protection for their incomes. Such an apprenticeship system can be found in Switzerland too. America’s capitalism was great, but it is now firmly in the hands of Big Business with less and less competition to be found. All in the name of cost competitiveness. A sound concept that has been taken into an extreme dogma. Just like shareholder value. Is ultra cheap energy and ultra cheap money really so healthy? Are our resources worth nothing? No. The German exit from atomic energy was decided despite of the huge costs and some loss in cost-competitiveness. Out of moral duty towards future generations and security concerns for the population. In a world where powerful nations and powerful firms are constantly arguing with the costs, a nation that does what is right in spite of the costs wins admiration. The message Germany sent: Money is important, but not the highest thing. As a result Germany is the only major Nation that did take resolute action after the Fukushima tragedy. All the others, even Japan, gave in to the pressure of big business. They argued with the “sacred cow” of cost competitiveness and threatened “if you increase our costs, we will lay off thousands of workers”. Something they would do anyway. The message from Tokyo to Washington to the world: We can’t afford to embrace Renewable Energy, because it would make us less cost-competitive. It is a dangerous simplification of Economics to reduce it to cost cutting and cost-competitiveness. In itself a healthy concept, but taken to an absurd extreme, it is utterly self-destructive and deflationary for mankind in the long run. Products are sold because they meet needs, not because they are simply cheap. Instead of focusing on quality and durability to meet customer needs and reduce waste, we minimize cost and maximize waste. Thanks to taking the morally right decision to move German society away from nuclear power, the nation has unleashed innovation and created thousands of jobs. Small and big nations are now looking at it for leadership in the effort to avert further global climate destabilization. This moral standing on nuclear power and the environment is something the world admires.
Commending Germany, but avoiding to judge other nations
There is growing criticism of Britain and Hungary. Even of Canada. But I really believe we should be careful with judging nations for not helping more. I think Britain would be showing more compassion if the situation with Scotland, BREXIT referendum and existing influential minorities would be slightly different. We should not judge Britain because we commend Germany. We can only be sad for the nations that will miss on the warming experience of helping someone in need. If they would think of their own long term economic interests, they would rush to help. Because there is the promise of a blessing to those who are generous with the poor and alien. It is a godly promise. History is littered with empires that have lost all their power for going against God’s heart or His people. Helping these Syrian refugees is in Europe’s and America’s own interest. I’m only surprised at the way media is focusing on criticizing Britain while sparing the USA. The current U.S. Administration is not stepping forward to take many refugees. The USA has a moral and geopolitical responsibility to help. President Obama encouraged the armed uprising against and the removal of leaders in Sunni-Arab states, while shielding Teheran’s. He meant it well, but it is in this vacuum & chaos that the region was thrust into civil war. Some Western governments used military force to destroy the structures of power that had kept the region ill but stable for decades. Sure, Shias and Sunnis have had inner hostilities for centuries, but I feel the USA, France and Britain have a geopolitical co-responsibility to some degree for the magnified chaos the Middle East is since 2011. The plan of Washington-Paris-London to remove dictators by military force was risky, but to strike and destabilize Sunni-Arab states only while sparing Iran, emboldened the latter to expand aggressively. This hastened a bitter proxy civil war. Many in Britain, France and the US Congress questioned this daring armed involvement in the inner affairs of Muslim states to no avail. I remember the White House putting all its weight to force Berlin to join the military strikes against Sunni-Arab regimes, but Berlin stood its ground pointing to the historical risks and was proven right by what unfolded.
The irony is that the one Western power that wisely showed restraint in Iraq and Northern Africa, is the one power stepping forward to cope with the follow-up, taking in the war refugees and give them a home. Germany has compassionately taken “the lion share of the refugees, costs and risks” without blaming the USA, France nor Britain. This compassionate behavior towards Moslem refugees despite the huge costs along the resolute response to the Fukushima tragedy to exit Atomic Energy (again despite the huge cost) is the moral leadership people from Latin America to the Far East have been waiting for.
The world over people are willing to follow a nation that is not only doing things out of profit or because the costs are acceptable, but because they are the morally right thing to do despite the cost. The more nations follow Germany, the better the multiple risks and challenges will be able to be contained and managed. That is in the interest of Europe and the whole international community.
This crisis will only accelerate what has been happening for years: the rise of Germany as a Global Geopolitical and Moral Power. The one trusted Western power welcome at every regional conflict and major global challenge on this planet.
Christian Takushi MA UZH, Macro Economist, 4 September 2015 – Switzerland.
* Remembering a refugee tragedy of staggering proportions: different historical sources estimate the number of German civilians killed during the flight and expulsion of German civilians from Eastern Europe at a minimum of 550’000 to a maximum of 2’500’000. A staggering number; even 550’000 civilians lost poses questions as why Allied Command left so many refugees to their own fate. Exact accounts are difficult, since at the end of WW2 the plight of fleeing German civilians was overlooked by the international community. Fleeing civilian treks were exposed to air bombardments, artillery fire, rape and acts of revenge.
Disclaimer and Warning: The opinions expressed here reflect the personal view of Christian Takushi and the current stage of his Global Macroeconomic & Geopolitical Research. His analysis and views are completely independent. The views of the independent experts in Christian’s global panel and network were also taken into consideration. Readers should be aware that global macroeconomic and global geopolitical research are highly complex and subject to sudden changes and shocks.